As workplaces evolve, so too do the methods of evaluating employee performance. The traditional annual performance review, long a source of both anticipation and anxiety, is increasingly being scrutinised as employers seek more effective ways to engage with their teams. With the rise of hybrid work models and faster-paced environments, many organisations are opting for ongoing feedback rather than relying solely on a once-a-year assessment.
A New Approach to Performance Management
For decades, the annual review has served as a pivotal moment in the corporate calendar, combining feedback, salary discussions, and career development into one high-stakes meeting. However, some prominent companies have begun to abandon this model, while others are adapting it to fit a more fluid work environment. As Vanesa Cotlar, Vice-President of People and Culture at PolicyMe, a digital life insurance provider based in Toronto, explains, “This shift is not just hype, but it’s also not a full-on ‘death of annual reviews.’ Many organisations are layering in more frequent feedback and calibrations on top of the annual review, not fully abandoning it.”
At PolicyMe, the focus has shifted towards weekly one-on-one meetings that facilitate ongoing feedback and clarity. Cotlar notes that annual reviews are now designed to summarise the year’s insights rather than deliver shocking revelations. This approach resonates with productivity expert Ann Gomez, who highlights that timely feedback is essential for personal development. “More and more organisations are emphasizing ongoing, real-time feedback. This is the optimal way to develop others,” she states.
The Persistence of Annual Reviews
Despite the shift towards continuous feedback, not all experts believe that traditional performance reviews are becoming obsolete. Dr. Linda Duxbury, a professor at Carleton University’s Sprott School of Business, suggests that the fundamental nature of performance evaluations remains unchanged. “I haven’t actually heard that they’re changing,” she asserts. Duxbury points out that while some companies may have moved away from formal annual assessments, many still retain some form of annual review to consolidate feedback.
One of the significant challenges highlighted by Duxbury is the burden placed on managers, who often lack the necessary training and time to conduct effective evaluations. “It’s much more challenging to do a review for somebody whose performance needs work,” she explains, indicating that many managers struggle with difficult conversations and may even fall prey to psychological biases that skew their evaluations.
The Practicalities of Continuous Feedback
While frequent feedback is hailed as a beneficial practice, it is not without its risks. Both Cotlar and Gomez caution that if not executed carefully, ongoing assessments can lead to employee fatigue and anxiety. The annual review still provides a structured opportunity for alignment on performance and compensation, allowing managers to step back and identify long-term trends. However, frequent check-ins can help foster stronger relationships and provide immediate developmental feedback.
“The sweet spot is ongoing, human conversations supported by a light structure,” Cotlar explains. “The annual review should be a summary, without the ‘big reveal’ energy that can undermine trust.” Gomez agrees, stating that effective feedback can significantly enhance employee engagement and performance when delivered in a constructive manner.
Changing Expectations Among Generations
Another factor influencing the evolution of performance reviews is the expectation from younger employees. Many in the workforce today seek regular coaching and developmental feedback, seeing it as integral to their growth and job security. This generational shift is prompting organisations to rethink how they approach performance management, shifting the focus towards more continuous, nuanced, and skill-demanding practices.
Why it Matters
The transformation of performance management from annual reviews to a more continuous feedback model reflects a broader change in workplace culture. As businesses strive for agility and adaptability, it is essential that they cultivate a supportive environment that encourages ongoing communication. This shift not only aligns with the expectations of a modern workforce but also promotes greater employee engagement and retention. Ultimately, organisations that embrace this evolution will likely find themselves better equipped to navigate the complexities of today’s fast-paced business landscape.
